HomeBase MetalsBHP Billiton gives Samarco more financial support

BHP Billiton gives Samarco more financial support

BHP Billiton has approved further financial support for Samarco, which is jointly owned by mining giants BHP Billiton Brasil and Vale.

Samarco is globally recognised for the disastrous tailings dam incident, which took place in Brazil in November last year.

BHP Billiton has approved the amount of $181 million to fund the remediation and compensation programmes, identified under the Framework Agreement, which the Renova Foundation governs and oversees. This amount will be offset against the group’s provision of $1.2 billion, recognised as at 30 June 2016.

In addition, a short-term facility of up to $115 million will be made available to carry out remediation and stabilisation work and to support Samarco’s operations.

Funds will be released to Samarco only as required and subject to the achievement of key milestones. The short-term facility allows BHP Billiton Brasil to preserve the value of its investment as options for restart continue to be assessed.

A restart of operations is important for Samarco, BHP Billiton Brasil, Vale, the local communities and for the Brazilian economy, BHP Billiton said in a statement.

“However, the restart will occur only if it is safe and economic to do so and the necessary approvals have been obtained from Brazilian authorities. BHP Billiton Brasil continues to work through options for restart with Vale and Samarco,” the company added.

In July this year, the BHP Billiton board of directors approved $134 million to support the Renova foundation to allow the continuation of reparatory and compensatory programmes.

BHP Billiton said at the time that the safe restart of the mine operations remained an important priority, along with the restructuring of it’s debt.